Viability Test Tool General Specification

DECC HEAT NETWORKS INDIVIDUAL HEAT METERING

VIABILITY TEST TOOL GENERAL SPECIFICATION

Date: 24th October 2014

Tool version: 141024 DECC Heat Metering Viability Tool v5c

DECC HEAT NETWORKS INDIVIDUAL HEAT METERING

VIABILITY TEST TOOL GENERAL SPECIFICATION

Date: 24th October 2014

Tool version: 141024 DECC Heat Metering Viability Tool v5c

Introduction

This document provides a general specification of the tool developed to produce an evaluation of the technical and financial viability of implementing individual heat meters in heat networks in order to meet the requirements of Articles 9 (1) and 9(3) para2 of the EED[1].

Who is required to assess viability?

Any organisation responsible for delivering heat or cooling to dwellings or non domestic units and billing for it is required to produce an assessment of whether it is technically and financially viable to implement individual heat meters. To this end, these organisations will use this tool to input information about the buildings they deliver heat to in order to obtain an evaluation of viability.

Evaluation of viability

Viability assessment of individual heat meters implementation in dwellings and non domestic units maybe more or less complex depending on:

• The heat distribution technical set up in a building;
• The number and type of dwellings or non-domestic premises being served (e.g. flats in blocks or detached houses);
• The number of flats and floors and their layout in a block;
• Accessibility to properties, space availability and isolation valves, and electricity points in adequate areas;
• Legal issues such as requirement for tenancy and lease agreements’ changes or legal challenges from occupiers;
• Requirements for pre-payment options;
• Requirements for energy display units, TRVs and time controls to aid occupiers to manage their energy usage once the meters are installed;
• Requirement to run education programmes post-installation and information provision prior to the implementation;
• Whether separate heat billing is produced or not and whether this is produced in house or outsourced.

Due to these complexities which in many occasions may be very specific to individual networks or buildings, this tool offers a generic assessment based on average costs and estimated savings which cannot include all above considerations. Only the main standard costs identified as potentially most likely to be incurred in a generic implementation are taken into account but it should be considered that any specific non standard circumstances may have an impact on the viability result obtained through this tool.

Data sources and assumptions

• The discount rate for the NPV is taken as 9%.
• The NPV is calculated over a period of 10 years.
• The % heat savings for domestic achieved through the introduction of heat meters or HCAs is on average 20%[2]
• The % heat savings for non-domestic demises achieved through the introduction of heat meters or HCAs is on average 10% (there is little evidence that refers to non-domestic saving from introducing heat meters – it is assumed that reduced occupant control and incentive would mean a lower potential for saving. Half that of domestic energy saving is assumed to be reasonable)
• Network efficiency is assumed to be 90%[3]. This considers the efficiency of the network distribution and associated losses up to the building, and not the losses incurred inside the building.
• Boiler efficiency is assumed to be 85% as typical for a good/optimal performance type[4].
• The heat demand savings are estimated to be half of final % (as defined above) in year 0, when the investment and installation is produced, and full % savings are achieved for year 1.
• The cost of gas is taken from the DECC Interdepartmental Analysts’ Group (IAG) (IAG projections, Table 5 - Retail Gas Prices (real for year of calculation, p/kWh), for a Central price scenario (Commercial/ Public sector). From e.g https://www.gov.uk/government/publications/valuation-of-energy-use-and-greenhouse-gas-emissions-for-appraisal
• Year 0 of the NPV calculations is considered to be the current year at time of assessment.
• The annual domestic post-implementation of heat meters/HCAs heat demands are obtained from the DECC heat meter impact assessment, SAP (2005) is utilised to quantify proportion of domestic hot water heat demand if applicable.
• The annual non-domestic post-implementation of heat meters/HCAs heat demands per building activity type are obtained from Climate Change and the Indoor Environment: impacts and adaption (CIBSE TM46 (2005)). ISBN 9781903287958,
• The annual domestic and non-domestic post-implementation heat demand is weather corrected. Weather correction has been approximated using the % average difference provided in TM46:2008. This uses the average degree days between 1998 and 2007. [reference as above]
• For domestic, the average cost of a heat meter with AMR capabilities is £200. The assumption is that these are wireless and do not require electricity connection.
• For domestic, the basic cost of installation of a heat meter is £60 when there are no issues/problems identified. This basic cost is incremented according to the following factors:
• Would there be any issues with arranging access to the property and to the areas for fitting the meters?
• Is there access to the pipework without the need to damage decoration or building fabric? e.g. cupboard access

If answer is No to first question and Yes to the second, the basic cost is applied.

If answer is Yes or Unknown to the first question and No or Unknown to the second, the basic cost is incremented by 100%.

Otherwise, an increase of 50% on the basic cost is applied.

• Are there isolation valves installed that will allow the non-domestic units or separate tenant areas to be isolated?
• Is there a 600mm length of pipe accessible at the entrance or near the dwelling?

If answer is Yes to both questions, the basic cost is applied.

If answer is No or Unknown to both questions, the basic cost is incremented by 50%.

Otherwise, an increase of 25% on the basic cost is applied.

• The average number of flats per storey in blocks of flats is calculated from the total number of flats indicated by the user divided by the number of storeys.
• Cost of data gathering equipment, installation and commissioning: this cost is applied as follows:
• Data collector: a cost of £2,000 is applied per block of up to 250 dwellings. When there are more than 250 dwellings per block, the number of data controller units required is calculated in 250 increments and applied to more than one block if applicable.
• Data collector: for reduced number of dwellings the collector reduces in cost; up to 64 is £950, up to 32 is £800 and up to 8 is £650.
• Commissioning: a cost of £7,500 has been identified from data sources per data collector (and up to 250 dwellings) for this as an average. An approximate, graduated cost has been applied as follows: £50 per dwelling up to 50 dwellings; £30 per dwelling for the following 100 dwellings up to 150 dwellings; and £20 for additional dwellings up to 250 dwellings. There is a maximum cost of £7,500 (reached at 250 dwellings) applied per block and collector as applicable.
• Software set up cost: a one off set up cost of £15 per dwelling is applied.
• Receivers: the cost of a receiver is £200. Sources have indicated that the requirement for receivers and their numbers is highly dependent on the specific topology of the building and flat distribution and on the materials in the building which may block the radio signals. On average, in a standard configuration, it could be estimated that a receiver may be required every 10 m or so, and possibly only between every second and third floor. Therefore, the following assumption has been applied for the allocation of receiver costs to the tool:
• In blocks with less than 5 flats, one receiver is applied per every 2 floors;
• In blocks with less than 9 flats, 2 receivers are applied per every 2 floors;
• otherwise 3 receivers are applied every 2 floors;
• In any other dwelling types it is assumed receivers are not required.
• Operational costs (meter reading, data processing, and billing information) are assumed to be £70 per dwelling per year as the minimum cost which could be obtained via outsourcing. This is assumed to include invoicing and payment processing.
• Lifetime of meters and all other replacement equipment is assumed to be 10 years.
• The costs of implementation of TRVs or time controls are included in the cost calculations of heat meters or HCAs if none are already installed. The CBA tab includes, in addition to the viability calculations, calculations that show the NPVs when including a basic time or temperature controller which is assumed to be installed at the same time as the meters/HCAs at an installed cost of £50 per dwelling or per 100m2 of non-domestic demise.
• The capital cost for an installed HCA is about £40.
• Data gathering costs and systems are deemed to be the same for HCAs as for Heat Meters.
• The capital cost per installed water meter is £150.
• Lifetime of HCAs and water meters is 10 years.
• Lifetime of temperature controllers is 15 years.

• Non domestic heat meters are assumed to be and work in a similar way to domestic ones with the only difference being the sizing of the meter which could increase the cost of the heat meter depending on the flow rate. An average meter cost of £1,500 is applied in the tool. All other cost components are deemed to be the same as for domestic.
• Non Domestic cost for HCAs is assumed at this point to be the same as for Domestic.
• For Mixed use buildings, a combined calculation of the data gathering costs is produced to take into account the one off building costs overall (shared between all dwelling and no domestic units).
• Assessment of viability of heat metering for cooling is only applied to non domestic buildings.

Tool specification

What is evaluated?

The tool evaluates the technical and financial viability of buildings served by district or community heating as follows:

• Individual buildings or group of buildings where the following characteristics are all the same;
• Parts of buildings, where different technical characteristics apply to different units to be metered separately.

The characteristics which need to be identical when evaluating more than one building are:

• Location;
• Age;
• Building Use;
• Heat distribution system
• Heat emitters
• Type of hot water flow and return to each dwelling
• DHW source
• Controls present
• Same number of floors, flats, flat types and configuration.

For domestic properties this means that the following are evaluated separately on each test:

• Detached dwellings: 1 or more if their characteristics are the same.
• Semi-detached houses: as many as required when their characteristics are the same.
• Terraced blocks: require for each block, the number of terrace houses and number of end of terrace (as semi-detached) for each.
• Flats in blocks.

Each one of the above must be tested separately and never combined together.

Buildings with no heat meters (including those which currently have HCAs) should be evaluated for viability.

Information required

Some information is mandatory and essential for the tool to evaluate viability. Mandatory information required is shown with red cells next to each question/answer in the tool interface.

1. Generic Information

This is general information about the building(s) or building parts being assessed

1.1. Building/s name or unique identifier

1.2. Location: users must select through the available drop down options the part of the country where the building/s is/are located. This is used by the tool to weather correct the domestic and non domestic heat demand.

1.3. Building Age: users need to identify via the drop down options whether building/s is/are pre-1917, 1918 to 1938, 1939 to 1959, 1960 to 1975, 1976 to 1982, 1983 to 1989, 1990 to 1999 or post 2000. This is used by the tool to identify the typical average annual heat demand.

1.4. Building use: users should also identify whether building/s being assessed are domestic, non domestic or mixed. In the case of mixed buildings, both the domestic and non domestic specific information should be entered by the user. The tool then evaluates the 2 parts of the building and provides an assessment of whether the overall building is viable or whether either the domestic or the non domestic parts are viable on their own.

1.5. Number of separate blocks (of one use or mixed) to be assessed: users need to identify the number of individual buildings/constructions being evaluated, e.g. one or more block of flats, or one or more detached dwellings. In order to be able to model more than one construction/building, please note that as described in the above section all technical characteristics of each domestic or non-domestic area independently must be identical.

1.6. Number of individual non domestic units in the building(s);

1.7. Presence or absence of heat cost allocators (HCAs): this is used by the tool in the event that Heat Meters are deemed to be viable, to provide an informative note in the Results section to advise the user to discuss the current presence of HCAs with the regulator if applicable. The results note that HCAs do not need to be reinstalled if already present. The energy saving doesn’t include space heating if HCAs are installed.

2. Technical Viability

2.1. Heating distribution to individual dwellings from the central heat source: users to indicate whether heating is distributed via Low Temperature Heat Water (LTHW – up to a maximum of 90 degree C) or other medium to domestic buildings. If the answer is ‘Other’, then Heat Meters and HCAs are not technically viable and the evaluation of domestic viability is completed.

2.2. Heating distribution to individual non domestic units/tenants from the central heat source: users to indicate whether heating is distributed Low Temperature Heat Water or other medium to non-domestic buildings. If the answer is ‘Other’ then Heat Meters and HCAs are not technically viable and the evaluation of non domestic viability for heating is completed.

2.3. Identification of whether non domestic units are served by a communal cooling system: if they are not, then viability testing of non domestic cooling is not applicable.

2.4. Cooling distribution to individual non-domestic units from the central heat rejection plant: users to indicate whether cooling is distributed via Chilled Water or other medium to non-domestic buildings. If the answer is ‘Other’ then Heat Meters are not technically viable and the evaluation of domestic viability for cooling is completed.

2.5. Type of chilled water flow and return entry to each non domestic unit or separate tenant area: if this is either Unknown or there are Multiple Points of Entry then Heat Meters are not technically viable and the evaluation of domestic viability for cooling is completed.

2.6. Fresh air supply type: Natural or Local Mechanical ventilation; Central/Communal Mechanical ventilation; or Centralised Air conditioning. If the answer is Centralised Air Conditioning, then Heat Meters are not technically viable for non-domestic heating, nor for cooling.

2.7. Does the supply ventilation also provide heating to the non-domestic units or separate tenant areas? If the answer is ‘Yes’, then Heat Meters are not technically viable for non domestic heating. This question and answer is only applicable if the fresh air supply type is via mechanical ventilation.

2.8. Does the supply ventilation also provide cooling to the non-domestic units or separate tenant areas? If the answer is ‘Yes’, then Heat Meters are not technically viable for non domestic cooling. This question and answer is only applicable if the fresh air supply type is via mechanical ventilation.

3. Specific Domestic Information

This is the required information when assessing the financial viability for domestic (dwellings) units. If the user is assessing only non domestic units or buildings this information is not required.

3.1. Number of detached houses: number of detached houses being evaluated together because they have the same characteristics. Note that the number of detached houses should be the same as the number of blocks indicated in the Generic Information section. If evaluating detached houses, no other dwelling types can be included.

3.2. Number of semi-detached houses: number of semi-detached houses being evaluated together because they have the same characteristics. Note that one block will have up to 2 semidetached houses (as long as they both retain the same technical characteristics). If evaluating semi-detached houses only, no other dwelling types can be included except for terraced houses where the end of terrace units should be entered as semi-detached dwellings.

3.3. Number of terraced houses plus their corresponding end of terrace houses in each block (modelled as semidetached houses). One block will have several terrace houses and potentially 2 semi-detached (as long as they retain the same technical characteristics). If evaluating terraced blocks, no other dwelling types can be included except for end of terrace units that should be entered as semi-detached dwellings.

3.4. Number of flats. These can be all modelled together. If evaluating flats, no other dwelling types can be included.

Checks are built into the tool to ensure that different types of dwellings as identified above cannot be entered together - where this occurs red cells will show next to each entry, together with a warning message.